Friday, November 14, 2008

Credit Card Companies Saving Themselves

Today credit card companies are doing more and more to try and save themselves from the crisis that is effecting so many of our financial intuitions. But in reality they may just end up losing and hurting their customers. The latest scheme now being used by some credit card companies involves watching where and how you use your credit card. When they observe purchases that they deem to be a characteristic of a risky customer they play to lower you credit limit and even possibly closes your credit card.

As credit tightens the credit card companies only want to give credit to the people that are 100% sure to be responsible customers and pay back their debt. They will also keep track of what you say when you call the customer service number in order to figure out if you are a risk for the company or not. The top places that could hurt you when using a credit card are: Bars, nightclubs, gambling institutions, cash advances, charging the necessities, marriage counseling, and massage parlors and strip clubs.

The credit card companies are now starting to look at the lifestyles of their customer and decide whether or not they are the type of customer they want to do business with. Not all credit card companies are of course adopting all of these tactics but the trend is disturbing. For example Visa may not have the same list of purchases that are disapproved of as American Express, and the next company may have no such policy at all. Each company is developing their own model that they go by to determine what and who is a risky customer making risky purchases.

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